Time running out to apply for cash and expert advice on foreclosure relief

By Pete Carey pcarey@mercurynews.com

Posted:
12/22/2012 02:46:50 PM PST

Updated:
12/22/2012 04:48:46 PM PST

If you lost a home to foreclosure you may have money or free legal advice coming to you under two independent programs whose deadlines are approaching fast.

The national mortgage settlement will divide $1.5 billion among qualifying foreclosure victims who respond to a mass mailing by Jan. 18. The payments are part of a $25 billion settlement of a lawsuit by 49 states against five big banks.

All of the $1.5 billion will be divided among those who respond. About 1.75 million letters have been sent to people who may qualify.

"The money's going out no matter what," said Patrick Madigan, the Iowa assistant attorney general directing the payments. None of it reverts to the banks, he said.

To be eligible, you must have lost your home to foreclosure between Jan. 1, 2008, and Dec. 31, 2011, and the foreclosure must have involved mortgages from one of the banks, or been serviced by them: Ally Financial/GMAC, Bank of America, Citi, JPMorgan Chase or Wells Fargo.

Consumers Union has been encouraging foreclosure victims to apply before the deadline passes.

"We want people to know if they are eligible they should claim their money," said Nora Garcia of Consumers Union. "It's not a scam."

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"The thing we've run into is they think this another scam. This is not a scam. This is legitimate. The banks are not administering this money. The National Mortgage Settlement Monitor is administering this," she said.

Under a second program called independent foreclosure review, homeowners whose homes were foreclosed on between Jan. 1, 2009, and Dec. 31, 2011, by any one of more than two dozen loan servicers can have their loan documents reviewed by an expert to see if proper procedures were used. There could be financial relief for some borrowers.

Another important date is coming up for Californians in trouble with their mortgages or facing foreclosure. On Jan. 1, the Homeowner Bill of Rights becomes law.

That is the name for some new laws that will protect homeowners in foreclosure or nearing it; give them more notice about their ability to apply for loan modifications; prevent banks from using machines to sign foreclosure documents, and require loan servicers to have a single point of contact to answer questions.

Homeowners can file lawsuits if they aren't satisfied with the servicer's compliance with the new laws.

Deadlines near for foreclosure relief
There could be some cash in your future -- or at the least, some free, expert advice on your legal options -- if you have lost a home to foreclosure. Check out these programs before their deadlines pass.

Independent foreclosure review. Deadline: Dec. 31
If your primary residence was involved in a foreclosure process between Jan. 1, 2009, and Dec. 31, 2010, you may qualify for a free independent foreclosure review. That could lead to compensation or some other form of relief.
On the Web: www.independentforeclosurereview.com
Call 1-888-952-9105

National mortgage settlement. Deadline: Jan. 18
Borrowers who lost their home due to foreclosure between Jan. 1, 2008, and Dec. 31, 2011, and whose loans were serviced by one of five big mortgage servicers can qualify for cash payments. There's $1.5 billion to be divvied up among those who respond.
On the Web: www.nationalmortgagesettlement.com
Call toll free 1-866-430-8358